The Economic Coordination Committee (ECC), in a meeting chaired by Finance Adviser Hafeez Shaikh on Wednesday, increased minimum support price for wheat by Rs50 to Rs1,350 in order to safeguard growers’ interests.
The increase comes after a gap of five years, as the government last raised wheat support prices by Rs100 to Rs1,300 for 40kg bags back in 2014.
Although, the move will benefit local wheat growers, it is expected to push up prices of roti which have already increased two times in the last twelve months owing to rising flour and gas prices.
However, a Ministry of Food Security official claimed the new minimum support price would not translate in any increase in the price of roti. He said the minimum price will help farmers cover rising input costs.
He said the minimum support will encourage wheat production in the country while adding that the revised price is also lower than the Pakistan Agricultural Storage and Services Corporation (PASSCO) official rate of Rs1,375 on which wheat is being released to provinces.
The ECC meeting also reviewed various factors such as the global wheat situation, cost of production, export-import parity and domestic producer prices.
It was estimated that the cost of production of wheat had risen in 2019-20 to Rs1,349.57 per 40kg in Punjab and Rs1,315.72 per 40kg in Sindh, as per findings of the Agriculture Policy Institute.
The meeting was also told that the global wheat price hovers around Rs1,575 per 40kg and Rs1,440 per 40kg excluding duties.
The ECC also asked the Ministry of Food Security to approach provinces to make adequate wheat procurement in the coming season. In case of failure to procure stocks, any request by provinces to PASSCO would entail 100 per cent payment of incidental charges.
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The ECC also asked the ministry to invite provincial chief secretaries or their representatives in the next meeting for a detailed presentation on the rising circular debt on the commodity operation which had already crossed Rs450 billion.
On the proposal of Rs6bn PM Relief Package for Utility Stores Corporation (USC), the ECC approved a transfer of Rs4bn from the Benazir Income Support Program and another Rs2bn by the Finance Division for provision of essential commodities such as flour, sugar, ghee, rice and pulses at a fair price to the under-privileged sections of the society.
A high-powered committee led by the Adviser to PM on Commerce Razak Dawood has been advised to come up with a realistic and foolproof method involving use of IT to ensure poorest of the poor benefit from the scheme and subsidy by purchasing essential items from the 3,600 utility stores spread across the country.
The ECC also approved release of 200,000 tons of wheat at the rate of Rs1,375 per 40kg from the PASSCO stocks to the USC to compensate vulnerable segments of the society and discourage hoarding and profiteering. The financial implications of Rs1.314bn on account of price differential and incidental charges will be absorbed by the Finance Division.
A committee was constituted to look into the issues related to utilities, particularly the installation of gas connections, electricity and other facilities in the Special Economic Zones. The committee was tasked to submit proposals in the next meeting.
The ECC approved the proposal for execution of amendment to the implementation agreement governing Thal Nova Power Private Limited and Thar Energy Limited by increasing the time period for exercise of the government’s right to terminate both projects from 400 days to 490 days.
However, the ECC directed the Cabinet Division to take further input from the Planning Division and bring the matter back to the ECC if there were substantive and fundamental issues requiring further discussion and any change in the approval.
The ECC also approved a detailed proposal based on a comprehensive four-year Circular Debt Capping Plan of the Power Division to address the flow of circular debt through effective efficiency improvement measures and ensure an effective implementation of the National Electricity Policy 2019.
The plan, which mainly addresses sector inefficiencies, discrepancies in tariff regime, fiscal allocations and government policy measures, planning and debt servicing of Power Holding Private Limited Loans, would improve power distribution collection, 100pc collection by five distribution companies, reduce line losses, rationalize subsidy allocations, reduce running and permanent defaulters and power sector flows to less than Rs75bn per annum from the current level of Rs465bn per annum.
The ECC also approved a proposal submitted by the Ministry of Interior for release funds through a technical supplementary grant to the tune of Rs670.553 million to HQ Frontier Corps KP (North) Peshawar for the completion of laid down codal, financial, procedural and legal formalities for various Project Implementation Letters, including the upgradation of FC KP (North) training center at Warsak Peshawar and construction of FATA Levies Training Centre at Shakas and 10 extra FATA Levies check posts.